Summary Effective from 2005, benefits for long-term unemployed have been reduced in Germany to the level of social assistance. This measure reflects the view that “all who are able to work, should work” - a view which makes sense only if the government can distinguish the disabled from the...

Abstract This paper examines five possible explanations for the Great Recession of 2008 and 2009, using data for the United States and the eurozone. Of these five hypotheses, four are not supported by the data, while the fifth appears reasonable.

Abstract Monetary policy is superneutral in an overlapping generations model. Previous authors have argued that superneutrality does not hold in such a setting. However, the standard results rely on the counter-factual premise of helicopter money and are overturned if money creation through open...

Abstract The effective federal funds rate is determined in a competitive interbank market, while the target federal funds rate represents a policy variable. This paper proposes a theory of the determination of the effective funds rate. According to the main result, the latter is a Lagrange...

Abstract In the paper of Stefan Homburg recent proposals for capital income tax reform are considered. The analysis focusses on German taxes, but experiences from abroad as well as the European Savings Directive are also taken into account. Given the present complexity of capital income...

Abstract Stefan Homburg points out that in Germany commuting expenses have been deductible from the income tax base for a long time. Germany’s grand coalition has now restricted this deduction. The article analyses whether or not this was justified from an economic point of view. It is shown...